For the first time in a year, average values across the prime regional markets showed a positive quarterly growth (+0.2%), though on average values remain -10.3% below their 2007 peak.

Price growth was lead by the suburban, inner commuter and outer commuter markets, the latter seeing the largest quarterly increase. Evidence of an increase in demand from those moving out of London has fuelled growth in the town markets of Winchester, Oxford, Cambridge and Bishop’s Stortford in particular.

These established family markets combine a realistic commute into London, with access to good schools and recreational facilities.

Here average values increased by 1.6% in the quarter, though there remains a sufficient price differential in comparison to London to enable families to buy a country home and retain a flat in the capital.

As a consequence prime urban properties, particularly large terraced properties whose values are within 3.0% of their 2007 peak, have outperformed village and rural properties.

Further afield, in the wider south of England, the Midlands and the North, quarterly price falls have slowed to just -0.2% and -0.4% respectively, offering clear signs that values are bottoming out throughout the regions of England and Wales.

Even Cornwall, which has seen some of the largest price falls post credit crunch, saw the first quarterly price increase in two years of 0.2%.

Only in Scotland have prime prices continued to be driven down with annual falls of 7.3% across the country reflecting the fact that prime stock levels are 20% up on the same period of last year. However, properties at realistic prices continue to sell.

£2million+ country house market

On average prime country house values remained unchanged in England though they are down -2.3% compared to this time last year. This partly reflects the poor weather which has discouraged buyers from bringing new stock to the market.

We see this picture changing once spring finally arrives and expect this to act as a catalyst to this sector of the prime housing market. With prime country house values over 10% below their peak and prime London values 18.6% above their 2007 level, the relative value which they offer is likely to attract demand.

The market in 2013

The first three months have provided encouraging signs for the prime regional markets. We expect this to translate into modest house price growth across markets within commuting distance of London, though the extent to which consumer confidence improves will determine the extent to which this spreads beyond these areas.

Having previously seen price increases in the first quarter failing to translate into annual price growth, it remains too early to revise our current forecasts for 2013, though it would appear that the market is in a position to respond well to an improved economic outlook.